EU energy prices and self-sufficiency, 2001

This month ESPON presents insights in the sensibility of regions to variation in energy prices and energy self sufficiency. The rationale behind this map is that achieving a higher degree of self sufficiency has a price tag on it. Energy could become more expensive if less obvious energy sources are used. But the less self-sufficient a country is, the more costly it could be the change. The main question is: What are the costs and benefits of a higher degree of energy self-sufficiency?

Concept/method/measurement

The map shows a typology of the sensibility of regions to variations on energy prices and their energy self-sufficiency. A light green region represents a low sensibility and a high self-sufficiency, which, in general, is a favourable position. A dark blue region represents the opposite, a high sensibility and a low self-sufficiency, which makes this region more vulnerable.

Sensibility to variations on energy prices is established with the help of simulating price changes for energy. Energy self-sufficiency is a basic indicator on country level indicating the percentage of total energy production the country provides itself. The regions have been classified by combining their sensibility to price change above (high) or below (low) European average, with their highly self-sufficiency (above average) and low self-sufficiency (below average) on energy. This results in four classes that may be helpful designing regional policies considering energy dependency.

Note, that discussing energy issues at a regional level is very difficult because they are most of them placed at the national level or, sometimes even at European level. Gathering basic indicators at regional levels was a major problem for this exercise.

Interpretation

The four classes of combined sensibility and self-sufficiency each have their own characteristics.

The first group is the regions with low price sensibility and high national self-sufficiency (pictured light green). These regions may have few problems deepening their energy self-reliance, and may contribute positively for the development of other European regions, not so well suited. These regions are located in the Denmark, Norway and UK not surprisingly countries that are actually net exporters of oil.

In the other extreme we can find regions that are simultaneously highly sensible to price change, and are located in countries that have a low level of self-sufficiency (pictures dark blue). These are problem regions and are located in Bulgaria, Cyprus, Latvia, Lithuania, Hungary, Slovenia, and (to some extent surprisingly) parts of France and Italy.

The remaining two sets of countries deserve different policy priorities.

The first set is the regions that have a relative low sensibility to price changes, and have low self-sufficiency (pictured clear blue). They include the most important part of EU 15 (all regions of Austria, Belgium, Finland, Germany, Greece, Ireland, Portugal, Spain, Sweden, most of Italy and parts of France). For these cases, investing in renewables can be a reasonable way of achieving more self-sufficient and reliable energy supply, without facing excessive problems in the economy.

The final group of regions (mainly from Czech Republic, Estonia, Poland, Netherlands, and Romania) are characterized by low dependency, but high sensibility to price shocks (pictured green-blue). In this case the recommended policies should focus on improving energy efficiency as the key policy target, before important change can be obtained into renewable development.

Conclusion

There is no clear relation between energy self-sufficiency and economic development. Where the West still has the stronger economy and the East is catching up through higher growth rates, countries being high energy self-sufficient are situated in North and East Europe. Self-sufficiency combined with sensibility to variations on energy prices indentifies two groups of regions in need for different energy policy priorities: those that should increase their self-sufficiency by investing in renewable energy and those that should first focus on enhanced energy efficiency.